Each of the nine movies nominated for this year’s Oscar for best film may already have taken home a pile of tax subsidies. Seven brought back state goodies from the U.S. and two got cash for their work in the U.K.

And, according to data collected by the Manhattan Institute, the winner is….Wolf of Wall Street. The $100 million black comedy about (irony alert) over-the-top greed among sleazy stockbrokers got a 30 percent tax credit for making the movie in New York State.

The Empire State isn’t even the most generous when it comes to doling out tax incentives to filmmakers. In Louisiana, moviemakers not only get a 30 percent credit against overall in-state production costs but also an additional 5 percent payroll credit. Even better, filmmakers with no state tax liability can monetize the credits by selling them to firms that do owe Louisiana tax or even selling them back to the state at 85 percent of their value.

No doubt these credits are good for filmmakers. And I’m sure residents get a kick out of seeing Leonardo DiCaprio shooting a scene in their neighborhood (assuming they are not steamed over the related traffic jam). But is there an economic payoff in return for these substantial lost tax revenues as supporters claim?

Jason Dinesen, Deducting Miles Driven for Charity. “Taxpayers can take a deduction of 14 cents/mile for mileage driven in giving services to a charitable organization, or taxpayers can take a deduction for the actual cost of gas and oil associated with giving services to a charitable organization.”

Kay Bell, Time to pick the proper tax pro. She gets one thing wrong about the IRS: “For years, the agency has been trying to set up a system under which it register and test tax preparers to help ensure that they meet a minimum competency level.”

No, the agency simply wants to expand its control over preparers and help powerful friends in the big tax prep franchises. The “minimum competency level” stuff is a weak pretext.

Contrary to the popular “urban tax myth”, unfortunately perpetuated by uninformed journalists and bloggers, just because a person has the initials “CPA” after his/her name does not mean that he/she knows his arse from a hole in the ground when it comes to preparing 1040s.

True. But a lot of the best prepaers are CPAs. Not everybody needs a CPA. Many folks just need somebody who knows a little more than they do to help them put the W-2 income in the right place. But if you are doing a complex business return — even on a 1040 — a CPA may be your best bet.

That’s not to say only CPAs are competent preparers. Enrolled Agents can be very good, and there are many very competent unregulated preparers, like Robert. I think the competence curve between CPAs and unenrolled preparers would look something like this:

The more complex your return, the more likely it is that you will want to bring in an Enrolled Agent or a CPA, but if you already have a strong unregulated preparer who is taking care of your tax needs, you’d be foolish to switch.

Imagine the scene in a boardroom if the CEO walks in and said that he was going to incur a huge unnecessary expense for the corporation. The guy who came in as CEO would walk out with a termination check.

But some congresscritters believe that’s exactly what CEOs of multinational corporations are supposed to do, based on their behavior yesterday in a hearing called to beat up Apple for not wasting corporate resources paying more taxes than it legally should. From the Wall Street Journal:

Sen. Carl Levin (D., Mich.), chairman of the investigations panel, on Tuesday accused Apple of employing “alchemy” and “ghost companies” to escape tax collectors in the U.S. and Ireland, the base of the firm’s international operations outside the Americas.

“Apple has sought the Holy Grail of tax avoidance,” said Mr. Levin. “Apple is exploiting an absurdity, one that we have not seen other companies use.”

Mr. Cook countered: “There’s no shifting going on…We pay all the taxes we owe, every single dollar.”

It’s rich for a congresscritter to beat on a taxpayer for “exploiting an absurdity,” when every year Congress writes new absurdities into the law. A few that leap to mind:

The Section 199 deduction, to artificially divide a modern economy into favored classes, like manufacturers, farmers and architects.

The First-time homebuyer credit, A fraud-ridden boondoggle that cost billions while failing to affect home prices.

Cash for clunkers, helping the economy by destroying perfectly good used cars.

Tax credits for wind, ethanol and biodiesel, to help struggling entrepreneurs like Warren Buffett prove that old and inefficient technologies can make money with enough government subsidies.

Congress writes the tax laws, making them a horrendously-complicated mess. It’s rich for Congress to complain that other people understand it better than they do.

What’s the problem with all this? There is the revenue loss to the U.S., of course. But perhaps worse is the incredible inefficiency driven by the tax code. The price of high corporate rates is the raft of deductions and credits that encourage corporations to lower their taxes rather than produce great new products.Just imagine if Apple could replace all those tax lawyers with creative new software geeks or industrial designers. It might win back some of the market share it has been losing to Android in recent years.

The IRS issued proposed regulations for the 3.8% Obamacare tax on investment income Friday. I will do detailed posts on the in the coming days as I study them.

I’ll note two important items from my first overview of the proposed rules:

The rules allow taxpayers a free opportunity to redo their activity “grouping” elections for the passive loss rules for 2013. “Passive” business activities are subject to the the 3.8% tax. Because “passive” status often depends on how much time a taxpayer spends working in a business, how different operations or locations are grouped can determine whether they are passive.

The rules appear to allow you to pro-rate state income taxes in determining “net” investment income. That’s taxpayer-friendly, but it adds another level of complexity.

Everyone knows that taxing the very rich will have no perceptible effect on the deficit. It’s all for show. The president and Democrats in Congress can say they stuck it to the millionaires and billionaires. Fairness will abound. The Republicans can tell the world that they are reasonable people willing to compromise on issues as important as taxes. But Americans will still get more government than they are willing to pay for.

Some liberals have called for us to go over the cliff and to raise taxes across the board. Like Norquist, they are miscalculating. If everybody had to start paying more, there would be a lot more questioning of massive defense spending, egregious subsidies for industries, and entitlements run amok. But for now, we must be content with the rich paying more so we can get more than we deserve from our government.

You can’t pay for mass welfare benefits with a class tax. The mania for taxing “the rich” is a distraction from the enormous tax increases on everybody that will be required. The Rich Guy’s not buying.

And for those who would say “well of course the government has to spend more when the economy is hurting” only one question applies: has it helped? If you think so, I’ve got a tiger-repellant rock to sell you.

The taxpayer had excluded regular capital gains from a brokerage account on her tax return. Iowa properly rejected the deduction, but admitted her mistake was understandable:

Your position relies on the Department’s instructions for completing the tax return. We found that you are not the only one that made this mistake, so our instructions now clarify that these types of capital gains do not qualify for the deduction as shown above. In any event, the instructions are not controlling.

Iowa now has better wording on the deduction line and a flow chart to walk taxpayers through whether they should claim the deduction. It’s a big improvement, but it should be better. There should be a separate form to compute the deduction, with a checklist to complete to demonstrate eligibility.

The state examines every capital gain exclusion claim. Taxpayers should be able to submit the information the state asks for with their returns to preclude the examination; even if it would have to be paper-filed, it would save the state the time and money spent on unneeded exams.

A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains.

The cost of the awards is certainly far higher. A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.

It’s a chump’s game, and we taxpayers are the unwilling chumps. These things are to economic growth what steroids are to long-term fitness.

When you don’t remit withheld taxes, it might not just be a matter of getting your payments caught up. A New Jersey couple that ran an engineering firm failed to remit over $500,000 in withheld taxes to the IRS. They were sentenced last week to 44 months in prison after being convicted of charges arising out of the nonpayment. From the Department of Justice Press Release:

Evidence was also introduced that the DeMuros converted withheld funds for their business and personal use, including more than $280,000 in purchases from QVC, Home Shopping Network and Jewelry Television.

No doubt it was of the best-quality. Oh, and the couple still has to pay over $1.3 million in restitution to the IRS.

According to this morning’s Washington Post, President Obama’s opening tax offer in his negotiations with Congress over the Fiscal Cliff is the $1.6 trillion in new taxes that were the centerpiece of his FY 2013 budget. Recently, Tax Foundation economists used our Tax and Macroeconomic Model to simulate the long-term economic impact of the President’s proposals – specifically, his proposals to increase taxes on high-income taxpayers [full report here].

In short, the model results indicate that the President’s plan would not only lower GDP and capital formation, but it would reduce after-tax incomes for every household – not just families hit by the higher taxes.

This ruling has broad implications for many taxpayers owning real estate in Mexico. Taxpayers for years have had questions about whether Mexican fideicomisos are trusts. Some if these taxpayers may have even entered into voluntary disclosure programs and paid significant penalties over the fear that they may be subject to various penalties. However, if a Mexican fideicomiso is not a trust, then it is not a foreign trust, and no Form 3520 or Form 3520-A would be required to be filed.

Of course, private letter rulings are directed only to the taxpayer requesting it and they may not be used or cited as precedent. However, Rev. Rul. 92-105 is a ruling on which taxpayers can rely and can cite as precedent. Because there can be huge penalties for failing to file Forms 3520 and 3520-A and because the terms of each fideicomiso will vary, taxpayers should be cautious in determining whether they need to file Forms 3520 and 3520-A for Mexican fideicomisos.

Let’s hope the IRS provides more guidance so we can know what needs to be filed.

When “thank you” doesn’t cut it:

When a charity receives a gift, it needs to say more than a simple thank you.

The Internal Revenue Service requires that a donor produce a record from the charity to show a gift over $250 had no strings attached. A thank you note can be a good enough record, as long as it includes the magic words: “No goods or services were received in exchange for the contribution.”

Isn’t it immoral to send money to the tax man that should be going to the shareholders? United Kingdom M.P., Margaret Hodge, has an odd moral code. She thinks that it is immoral to — I don’t know? Not leave a tip after you compute your tax bill? She thinks that Starbucks should give the State more of their cash. From Rachel Moran at Reason.com:

In the past three years Starbucks has paid no corporationtax in the UK. Amazon has paid £1.8m, despite bringing a total revenue of £200m in the UK in 2011. Starbucks global chief financial officer Troy Alstead insists the company remains “an extremely high tax payer globally” but, as UK profits have been far from substantial, claims, “respectfully, I can assure you there is no tax avoidance here.” Similarly, Matt Brittin, the head of Google’s northern European operation, defends the company’s practices. “Like any company you play by the rules [and] manage costs efficiently to offer fair value to share holders.”

…

Google‘s Brittin told the committee that “we comply with the law in the U.K.” and “it would be very hard for us to pay more tax here based on the way we are required to structure by the system.” ABC News reports that Hodge responded by saying that the committee was “not accusing you of being illegal, we are accusing you of being immoral.”

If we are going to start talking about morality, let’s start with the morality of forcing people to hand over their money to politicians so they can buy votes with it. If I ever have an IRS exam where the agent offers no change to the return but says I’m a bad person, my client won’t be too upset.

Not just any Tom, Dick or Terry. “In a story Nov. 14 about a wind energy tax credit, The Associated Press misidentified Iowa’s governor. He is Terry Branstad, not Tom Branstad.” (Associated Press story).